SCOTT REED: Investment pros stay disciplined and focused

I watched the U.S. Open tennis tournament last week; I watch it every year. I have played tennis since I was old enough to remember, maybe earlier than that.
I dreamed as a kid of playing in the U.S. Open. OK, I admit I still dream of playing in the U.S. Open, but reality has set in and I know that it’s not going to happen. Not unless I can really kick my game up a level as a senior. There is always hope; you never know.
The U.S. Open has become famous for its night matches. I have no doubt that it started playing its marquee matches at night because that’s when television wanted them played, but I always enjoy them.
I can get my daughters put to bed for the night, slip into my easy chair and watch some tennis. The only problem is that the great matches can go past midnight and I am old enough to have to pay for that privilege.
Last week I was watching a match between a Croatian and an American. The announcers were talking about how the Croatian’s game had really come around this past year. They said that he had always had the shots but he had just been too impatient. He wanted to finish the point and win quickly, but he had found that playing the kind of game it would take to win quickly was just too risky. Consequently, he kept losing the big matches.
In his post-match interview he said he had finally learned to play with patience and wait for the right opportunity to finish a point. That’s why he was winning more, his world ranking had gotten much better and his earnings had increased significantly. All of this happened not from changing his strokes or his fitness, but by changing his strategy and getting his mind right.
I think that many investors want to use what they have learned as quickly as possible. They want to see the proof of their hard work immediately even if their goals are years away. It is the gratification of knowing you are good at what you do combined with the fear of having to wait 10 years or more to find out if you are right that makes it so hard to be patient with your investments.
A long-term view
But that is what the great investors seem to have in common: They have a long-term view that is unshakable and they are not sucked in by the day-to-day fluctuations of the markets.
In tennis, it’s not having the shots that matters; it is what you do with those shots that makes the difference. Just having a great cross-court forehand that you can hit five times in a row doesn’t help a bit if your opponent can hit his back to you six times in a row.
And I know of no one who can win every point. The greatest players in the world lose a lot of points in every match. What makes them great is that they know how to manage the match in order to win games, sets and matches. They play within themselves.
Jimmy Conners, one of the all-time tennis greats of my generation, once said that he was not a great champion because he was such a great player. He said he was a great champion because he was never scared to hit the right shot at the right time.
Conners said that so many players get nervous when they are about to lose or win a match and they start playing “not to lose” instead of “playing to win.”
When that happens you get into trouble.
I can easily relate that to the investment world. Those who play not to lose will change their strategy every time they hear someone on CNBC who sounds smart and says something that doesn’t agree with their investment strategy.
Those who play to win have done their homework, have picked a course and have confidence in their strategy. They know their strengths and they play to their strengths.
Many good tennis players are flashy and hit big shots. They have physical talent and natural ability. But the great players have discipline and focus.
Learn from them and take your investment expertise to the next level. Go pro in investing by taking what you have learned and applying discipline and patience to the process. It could make all the difference.
Scott Reed, CIMA, AIFA, is CEO of Hardy Reed Capital Advisors in Tupelo.